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BI Interest Rate Rises, +62 Citizens Should Invest What?


BI Interest Rate Rises, +62 Citizens Should Invest What?

Bank Indonesia  (BI) again raised the BI 7 Days Reverse Repo Rate by 50 basis points (bps) in October 2022. This means that the benchmark interest rate since the beginning of the year has risen by 125 bps to 4.75 percent.

However, the increase in interest rates is not only done by BI. A number of countries in the world have also raised interest rates quite high due to inflationary pressures, one of which is the US central bank The Federal Reserves (The Fed).

This decision will certainly increase public concern, including the fighters for Home Ownership Credit (KPR). This is because an increase in BI interest rates will also raise property loan interest rates.

Financial planners also provide tips on investment instruments that can be taken amidst the trend of rising central bank interest rates.

1. Mutual Funds

OneShildt Financial Planner Agustina Fitria said the first investment instrument to try is mutual funds.

The reason is, mutual funds have a variety of options that can be adjusted to their respective risk profiles. In this case, he suggests low-risk money market mutual funds.

"Usually we recommend for a period of 2 years (relatively short), for products with lower risks. For example money market products or government bonds issued with the appropriate time period," he told andrianus.my.id

Meanwhile, those who dare to take high risks can choose stocks. With a note, the investment must be with a long term.

"Stocks are not necessarily in two years have yielded results, because stock prices fluctuate," he added.

BI Interest Rate Rises, +62 Citizens Should Invest What?

2. Government Securities (SBN)

Another instrument that can be used as an investment choice when BI interest rates increase is government bonds or SBN. In addition to being safe because it is guaranteed by the state, the yield or yield on SBN is usually also raised following the BI interest rate.

"Increasing interest rates will also affect the interest rates on government bonds , which can be an investment choice. Coupled with rising interest rates, we can earn more profit," said Financial Planner from Advisor Alliance Group (AAG) Indonesia Dandy.

3. Deposit

Time deposits are also one of the attractive investment instruments amid the trend of rising interest rates. This is because the increase in central bank interest rates will not only raise interest rates on loans but also on deposits.

"With interest rates rising, deposit rates will also increase. So it can be used as an option," added Dandy.

BI Interest Rate Rises, +62 Citizens Should Invest What?

4. Gold

Dandy also suggested investing in gold when there was an increase in central bank interest rates. This is because gold prices tend to fall when the BI rate rises, and it is likely that many will sell their gold when prices are still high at this time.

"For gold instruments, it can be a long-term choice, because many have sold gold which has caused gold prices to fall. So it can be an opportunity to buy at a discount," he explained.

5. Stock

Stocks can also be an option. However, because the increase in BI interest rates tends to make the stock market depressed, it must choose the long term.

"Stocks for the long term are also excellent. For long-term stocks can be invested with dollar cost averaging, and diversification," he said.

However, Dandy emphasized that all investment instruments that were selected were again adjusted to their respective risk profiles. In addition, it must determine how long the funds or investments are made.


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